The Federal Open Market Committee reduced the federal funds rate by 25 basis points on Wednesday to a range between 4.5% and 4.75%. Slowing inflation and strong productivity gains imply that the Fed has ample room to keep cutting rates next year. The major takeaway from the policy statement is ... READ MORE >
Jerome Powell
Fed cuts rates to support a soft landing in the economy
The Federal Reserve on Wednesday reduced its policy rate by 50 basis points to a range between 4.75% and 5% to protect full employment and preserve the soft landing it has achieved following a historic price shock. The central bank also laid out a path of monetary policy that suggests additional 25 ... READ MORE >
FOMC preview: Why the Fed’s pivot to lower rates matters
The Federal Open Market Committee’s meeting on Sept. 18 will implement a significant turn away from a focus on price stability—which has been achieved—to supporting maximum sustainable employment. In turn, the policy pivot will create the conditions for greater fixed business investment, increased ... READ MORE >
Expect strong U.S. jobs report for August, but the devil is in the details
We expect a net gain in total employment of 175,000 jobs and an unemployment rate of 4.2% when the U.S. jobs report is released on Sept. 6. In addition, we expect average hourly earnings to increase by 0.3% on the month and for the year-ago figure to cool slightly to a 3.5% gain. The key to any ... READ MORE >
Powell at Jackson Hole: Policy pivot signals the start of rate cuts
Federal Reserve Chairman Jerome Powell’s speech at the Kansas City Fed symposium on monetary policy in Jackson Hole, Wyo., showed that the central bank is preparing for a policy pivot toward a rate cut designed to protect and preserve the economic soft landing achieved by the Fed. In his statement, ... READ MORE >
Fed holds rates steady as it sets up for September cut
The Federal Open Market Committee kept its federal funds policy rate between a range of 5.25% and 5.5% at its meeting Wednesday while signaling that it is moving toward easing its restrictive policy rate. We expect that the FOMC will reduce the policy rate by 25 basis points at its September ... READ MORE >
FOMC preview: Dot plot to imply two rate cuts this year
We expect the Federal Open Market Committee to keep its policy rate unchanged between a rate of 5.25% and 5.5% at its meeting next week. But we anticipate that the median rate forecast implied by the dot plot will indicate that the committee now expects two rate cuts this year, for a cumulative rate ... READ MORE >
Fed holds rates steady as rebound in inflation hampers progress
Citing a lack of progress in reducing inflation, the Federal Reserve kept its policy rate unchanged at 5.5% at its meeting on Wednesday, the same rate it has had since July. The policy rate continues to be highly restrictive and will keep the economy cool in the coming quarters. In the statement ... READ MORE >
Regime change: Businesses face higher costs in nominal and real terms
Higher-for-longer now applies to more than just the federal funds policy rate. It means a regime change for companies of all sizes when it comes to the cost of financing expansion or funding their operations. Whether it be high single-digit borrowing costs for large multinationals or double-digit ... READ MORE >
Fed holds rates steady as it implies three rate cuts in 2024
The Federal Reserve is looking to cut its policy rate three times this year, according to information inferred from the Summary of Economic Projections and policy statement released on Wednesday. The cuts would reduce the policy rate by 75 basis points, from the current range between 5.25% and 5.5% ... READ MORE >